Mortgage Banking: Direct Lenders
The demand for funds in real estate comes from the investment in physical property and from the securing of financing for investment in such property. Thus far, emphasis has been on the demand side, from investors in real property, and financial assets secured by real property. While investors in mortgage securities are effectively lenders, the supply of funds comes from institutions engaged in mortgage banking. Mortgage banking entails intermediation—provision of real estate financial services—in addition to lending. The term direct lender is used to describe the party engaged in lending to the borrower. Direct lenders include depository institutions such as thrifts and commercial banks, or a mortgage banker or broker, lending borrower funds not on deposit. The purchaser of a mortgage security is an indirect lender.
KeywordsInterest Rate Real Estate Cash Flow Secondary Market Deposit Insurance
Unable to display preview. Download preview PDF.